A new rule coming out of the U.S. Labor Department would extend overtime pay to millions of Americans, but a wide range of business groups say the end result of the change would be to put people out of work.

The new rule would require employees making less than $47,476 a year to receive overtime pay for working more than 40 hours a week, which is more than double the current eligibility threshold, according to the White House. That figure would be updated every three years, based on wage growth. http://1.usa.gov/1TnBO68

Some 4.2 million additional Americans would qualify for overtime pay if the new threshold goes into effect. In a statement, President Barack Obama said the rule change was "one of most important steps we're taking to help grow middle-class wages and put $12 billion more dollars in the pockets of hardworking Americans over the next 10 years."

The president's announcement was met with near universal scorn from business groups. The National Restaurant Association said while the Labor Department removed some of the most controversial language from the rule, the threshold was too high.

"Restaurants operate on thin margins with low profits per employee and little room to absorb added costs," said Angelo Amador, NRF's senior vice president of labor and workforce policy and regulatory counsel. "More than doubling the current minimum salary threshold for exempt employees, while automatically increasing salary levels, will harm restaurants and the employer community at large."

The National Association of Federal Credit Unions echoed the concerns of many groups when it said the new rule would hit small businesses hardest, given many operate on small profit margins.

"NAFCU is concerned they simply will not be able to absorb this large increase without directly impacting the services they provide," Executive Vice President of Government Affairs and General Counsel Carrie Hunt said. "Ultimately, this rule could hurt the very people it is trying to help."

David French, vice president of the National Retail Federation, told NPR the new rule could force employers to transfer employees from salaried positions to lower-paid hourly jobs.

"What our members have told us, what many other employers have told us, is there's not a golden pot of money out there sitting in employers' pockets where they can all of a sudden pay a lot more overtime pay," he said. http://n.pr/1XmpAND

The effects of the change on the association community are not clear. ASAE spoke out against a draft version of the rule last year, arguing that nonprofits are less able to absorb increased costs than for-profits.

"These organizations have no paying customers to whom they can pass on the increased payroll costs, and no owners or shareholders who can support an increase in total employee compensation costs through accepting a reduction in profits or dividend payments," ASAE said. "In short, nonprofit organizations have no expectation that their revenues will increase each year to offset the increase in wage payments to employees." http://bit.ly/1THFfSn

The rule is scheduled to go into effect Dec. 1.

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